“Resilience is accepting your new reality, even if it's less good than the one you had before. You can fight it, you can do nothing but scream about what you've lost, or you can accept that and try to put together something that's good.” – Elizabeth Edwards
When I was a kid, we never said the word resilience, but we did use the word tough. Being tough is just what we need right now; toughness is our ability to spring back, even when the world around us crumbles (think COVID-19). Our resiliency grows every time we flex – just like a muscle in our body. Developing a resilient procurement team likely means you are “starting over” – or creating a fresh start in some areas of your procurement ecosystem. If you’re feeling stuck or unsure where to start, you aren’t alone. Below are five ways that Procurement can help improve business resiliency:
SIG University Certified Sourcing Professional (CSP) program graduate Silver Chaudry discusses how category management takes sourcing initiatives out of silos to create shared objectives and continuous processes across business units that drive efficiency.
Category management is a strategic and collaborative approach to procurement involving the segmentation of related goods and services to proactively manage and consolidate spend, track savings and identify areas of improvement. Category management was first developed in the 1980s, evolving from strategic sourcing but differing as it is an end to end process where the analysis is continuously refreshed to keep up with changing market trends. (Strategic sourcing was typically reactive in nature, conducted for immediate requirements and taking place as a one-time event.) Category management also places emphasis on supplier development, where category managers work closely with suppliers to foster innovation and achieve superior outcomes.
COVID-19 has created a ripple effect of disruption through supply chains across the world, causing many companies to assess their weak spots and reevaluate their operations to ensure future resiliency and continuity.
Rebounding from the current crisis with more solid resilience is itself creating immense value. Forward-thinking companies are looking a step further, perhaps with the climate crisis clearly in view. They are leveraging sustainability and purpose – with an upside creating long-term value across a wide range of business levers, from competitive differentiation, grow sales revenue, supplier innovation to support future circular business models, talent recruitment and retention.
Procurement’s Key Role in Turning Purpose into Profit
With momentum growing toward stakeholder capitalism, businesses have made a greater commitment to sustainable purpose through reducing emissions of greenhouse gas, limiting plastic use, providing decent working conditions and more. The recent COVID-19 pandemic has brought risk mitigation and resiliency top-of-mind – and we’re seeing clear proof points that sustainable procurement is the answer.
SIG is always asking our event attendees, current and future members, and readers about their current issues and concerns. I have been tracking and analyzing their responses for almost 10 years now. While cost savings and value-add remain consistent and strong priorities, there's no doubt many are very concerned about meeting pandemic-related needs.
We are blessed to have a community of thought leaders and generous, experienced professionals who are willing to share their experiences and describe their wins.
We offer the following resources in your quest for COVID-19 related items specific to sourcing, procurement, and workforce management. SIG members can continue to search for related articles here.
In the resources listed here, you can learn how to set up crow's nest and a war chest, hear how Sprint/T-Mobile are managing the crisis using AI for their spend analytics, specific procurement best practices for today's market, how technology enhances continuity in your workforce and what happens if and when this is "all over." Plus, so much more.
So how do you get from tactical procurement metrics to more powerful spend/supply measures that help build new capabilities and favorably impact critical business outcomes?
We have mentioned some of the more expansive sets of metrics that organizations use to measure several areas:
● Spend/cost management and savings
● Supplier/supply performance
● S2P process metrics for process performance
● Underlying capabilities in talent management, digital, etc.
● Stakeholder-specific metrics related to the above
In this third installment, we’ll dive a little deeper into some example metrics, but the first order of business is to provide a framework giving the backdrop on the KPIs and use it to hone in on metric types before listing individual KPIs.
Pierre Mitchell, Chief Research Officer, Spend Matters
In Part 1 of this series on procurement’s key performance indicators (KPIs), we discussed how legacy KPIs need to be augmented to help procurement expand its value proposition. In this second installment of the series, we’ll focus on how to build a balanced “360-degree” procurement scorecard and highlight some truly KEY performance indicators that help foster the right behaviors and alignment across the source-to-pay (S2P) process and the broader value chain.
Everyone knows the old adage, “What you measure is what you get.” Known as the “Hawthorne Effect,” it has been shown that performance will improve when those performing the process know they’re getting measured on it. So, designing stakeholder-specific KPIs is critical to ensuring business alignment. The “SMART” (specific, measurable, achievable, relevant and timely) metrics model is an excellent framework to apply here. Still, the first step is ensuring a 360-degree measurement system that aligns procurement with:
Pierre Mitchell, Spend Matters’ Chief Research Officer
We live in a dynamic world where billions of people make billions of choices daily. The sheer multitude of choice makes it increasingly difficult to have shared experiences – those kind of global watershed moments that push change and innovation forward at an accelerated pace. Covid-19, in its own terrifying way, stopped us all and immediately narrowed our choices. But it also gave us one unified experience and one unified goal: Fight the virus, stop the spread.
A true global watershed moment had arrived. Suddenly, the whole world understood the importance of the supply chain. Procurement had been thrust onto center stage, and the spotlight was both harsh and illuminating.
Spotlight on Procurement
There’s no way to plan for every outcome. There just isn’t. No risk plan can predict the future with 100% accuracy. There’s no judgement to be laid at anyone’s doorstep. The impact of COVID-19 wasn’t something supply chain professionals could have easily seen coming. So, as the whole world watched the demand for certain products like N-95 masks, PPEs, disinfectant and toilet paper soar, they also saw the dramatic consequences of supply chains that weren’t built for pandemic-driven demand.
The links between the supply chain and business continuity, between business continuity and employment, between employment and economies, those links were now on stark display for everyone to see. Interdependencies that were once just the language of procurement professionals had become the common language of the world.
Chris Haydon, President, SAP Procurement Solutions
At the SIG Procurement Technology Summit, attendees will experience the latest procurement technology in a virtual Innovation Hall. These companies are using artificial intelligence, machine learning and robotic process automation to elevate the role of procurement, ignite innovation and impact the world.
Featured here are company overview, solution overview, and company approach and process to help you learn more about the following virtual Innovation Hall technology providers:
There’s no question that companies are turning to technology to manage many facets of their operations, and procurement is no different. Adopting a technology platform to manage one business unit can result in positive changes, reducing costs and increasing efficiencies. But what happens when a company decides to go through a complete agile and digital transformation?
Our client, College Board, decided to undertake such a sweeping change, and while they’re still on their journey, they are seeing positive outcomes across the organization. About five years ago, College Board saw successive changes in leadership with a new CIO coming in, followed by a new CPO. When they joined the team, College Board had disjointed technology – no department could communicate with another. So, the decision was made to jump into the deep end and take on a complete agile and digital transformation.
Building a Movement
The agile transformation, which would ultimately lead to the digital transformation, required a culture change at College Board. They knew behaviors had to change, both individually and companywide. There was a serious need for collaboration and cross-functional teams to remove the silos each department was in, which could be fostered by new technologies.
And College Board’s 1,800 employees and 250 contractors had to be on board. So, it all started with leadership. The organization’s forward-thinking CIO and CPO laid out clearly defined goals and strategies. Setting the example that this would be successful went a long way in encouraging employee buy-in.
What is your role and your day-to-day responsibilities?
I am head of WNS’ Procurement Services Business Unit. We support procurement organizations globally across all industries. In my organization, there are over 3,000 procurement professionals in 53 locations across the globe. We touch over $85 billion in spend globally and provide a wide range of services. Clients partner with us to operationalize their procurement function and improve financial performance and efficiency.
My responsibilities are broad, I spend most of my time running our business, engaging my team, focusing on building a stronger organization, meeting with clients and industry leaders, and solutioning. But I am always happy to roll up my sleeves and jump into any project. I am passionate about expanding procurement’s influence and helping our clients boost their performance.
Twelve years ago, I started Denali Sourcing. As a procurement professional myself, I know what our clients face daily. I’ve been asked to deliver on similar mandates and create value for the business that goes beyond cost savings. I founded and grew Denali Sourcing Services into a leading global procurement services organization and then joined WNS as part of our acquisition in 2017. In my current role, I work with a larger and more global client base. The evolution of the last decade has proven to me the significance of the value that procurement adds to the business, regardless of industry. I’ve always known that procurement was a huge value-driver, but I needed time to prove it.
Now, I am helping procurement organizations think about ways to transform operating models and enhance the procurement ecosystems across our entire client base. This includes helping companies with any of the following: